Are Kid-Friendly Mobile Phone Plans An Untapped Opportunity For U.S. Carriers?

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Hooking Them Young(er)

My daughter got her first mobile phone when she was five years old. That was 14 years ago now, and was far from usual. In fact, she had no one to call except her parents, which was kind of the point for me: her phone was a “kid friendly” device with just two main buttons - a Mom and Dad button to speed dial us. It was the coolest thing that she had, and so terribly uncool at the same time, as it closely resembled a toy. And so, a year later she requested an upgrade to a “real phone,” but, even with her new flip phone, she still had no one to call until the end of fifth grade, when many of her friends started getting phones.

Fast forward to today’s market and the core trend remains the same: most kids get their first phone around fifth grade, in preparation for moving to the scarier world of middle school. But what has changed, significantly, is when these same children want their first phone and how it is used. My daughter’s dilemma was who to call, but today, no one even wants to make calls; rather, the smartphone is the child’s doorway to social status. Instagram, Facebook, YouTube and more are the reason for owning a phone, and more and more parents are considering folding earlier, handing over an old device.

But from a carrier perspective, the under 13 year-old market is still relatively untapped. While more parents may be handing over phones, these are often not connected to a carrier’s network. As the use case has changed from one of calling, which requires the reliable connection of a cellular network, to one of data-driven social awareness, which kids can leverage WiFi for, grateful that they at least have a smartphone in their hands.

With wireless subscriber numbers reaching 100 percent penetration among the adult population, U.S. carriers need to better address this market by building offers for this age group that parents will find hard to turn down. And this is where we can still learn a few lessons from the European market, which hit 100 percent market saturation years ago and hardly slowed down. Take Tele2 in the Netherlands, for example: the company recently launched Tele2 for Kids, a plan that includes 1GB of data, messaging, and unlimited calls to just three phone numbers… all for the low price of just seven Euros ($8).

The limitations of this kid plan are part of the appeal for parents: 1GB of data (with no rollover) may teach kids to budget their data needs, ensuring that they continue to use WiFi as their primary data source. And just three phone numbers means access to parents and one friend only (pre-programmed in by the parents, of course). Naturally, your “angel” will ask for a bump up in data fairly quickly, (the carrier will be hoping so, anyway), but with plenty of WiFi available, most parents will be able to resist this. After all, the lack of unlimited data is a relatively hidden stigma for a child to handle: it’s not like having to make do with a flip phone in a world full of smartphones.

So why would a carrier do this? It’s hardly a lot of revenue and in many ways undercuts the current pricing structures that they offer. While that’s true, carriers are still, for better or worse, typically judged by the number of new subscribers that they add, and a plan such as this can significantly help drive adoption. And, of course, we all know that eventually the parents will cave to their child’s persistent requests for more data, giving the carrier more revenue and another grown-up subscription.